Noranda divisions report second quarter earnings

Across-the-board improvements in all of Noranda Inc.’s resource divisions made it an encouraging second quarter for the company. Second quarter earnings were $103.1 million, or 66 cents per share after preferred dividends, compared with $26.8 million or 12 cents per share a year earlier. For the six months ending June 30, earnings were $132.6 million or 80 cents per share compared with $48.2 million or 21 cents per share during the first half of 1986.

According to the company, results of MacMillan Bloedel are now fully consolidated with those of Noranda and results of previous periods have been restated to reflect this change.

Noranda says all divisions contributed to the improvement in second quarter earnings. Noranda Minerals benefited from the absence of strikes, generally good operations and somewhat improved markets. Although copper fabricated markets remained sluggish, Noranda Manufacturing’s earnings increased due to better aluminum prices.

During the quarter, Noranda Forest arranged a public issue of 18% of its shares for $351 million before commissions and expenses. In addition, arrangements were made to sell the 49% interest in Noranda Pacific for the equivalent of $189 million.

These transactions, which close in the third quarter, combined with the Hemlo Gold transaction completed earlier, produced unusual gains of some $488 million after taxes. The $210 million of these gains realized in the first half have been offset by provisions for possible future liabilities and impairment of asset values.

Two years ago, a program was begun to reduce debts by a minimum of $1 billion without affecting Noranda’s core businesses. Including MacMillan Bloedel and with transactions pending at June 30, some $2.4 billion has been raised in this program, $1.4 billion from sales of assets and $1 billion from various financings.

According to the company, part of this has been consumed by ongoing capital spending, but net debt will have been reduced by $2 billion when pending transactions are completed.

Noranda says the outlook for the balance of the year is quite encouraging.

While prices for most metals are still depressed by historical standards they have improved marginally over the levels of recent years. In addition, uncertainties regarding labor negotiations have now been largely removed.

A dividend of 12 1/2 cents per common share has been declared payable Sep 15 to shareholders of record Aug 17. For shareholders electing to take their dividends in stock, a price of $33.89 per share has been established.